Risk Management and Liability in Agritourism
Farmers and ranchers are legally responsible (liable) for the well-being of their customers and employees. Considering safety and minimizing risk are important parts of business planning.
To protect your agritourism business, it is important to create a risk management plan. Some of the main areas of risk and negligence include site safety risk, product risk, employee related risk, and financial risk. To ensure the well-being of your business, it is recommended that you avoid certain activities, use liability waivers, purchase insurance, practice good management techniques, train employees, and pay attention to the legal structure of your business.
Checklist for Managing Risk
- Contact State or Local Agritourism Organizations and Key Consultants - Key consultants to determine your needs are lawyers, insurance agents, financial managers, and accountants. See backside for available resources and technical
- Understand Local and State Health and Safety Laws and Regulations - See AgMRC Zoning and Health Considerations Checklist (http://www.agmrc.org).
- Inventory Areas of Possible Risk
- Site Safety: Consider physical site hazards including visitor activities and attractive nuisances such as farm equipment likely to attract children.
- Product: Consider what you are selling or producing and any health or safety regulations or considerations
- Employee related: Know your employees and know what will be required on-site to safeguard their health and safety
- Financial: Consider current record-keeping, billing processes, assets and debts
- Develop a Risk Management Plan
- Site Safety
- Post rules for customers and conduct regular inspections
- Post and implement employee rules and regulations
- Establish a labeling protocol for products
- Establish a protocol based on state regulations for handling products
- Decide on the right type and amount of insurance coverage
- Business liability
- Product liability
- Workers’ compensation
- Consider using preventative measures like waivers or product warnings if warranted.
USDA Risk Management Education Agency - Develops educational materials for 50 states.
Digital Center for Risk Management Education, National Ag Risk Library at the University of Minnesota, St. Paul, MN, Toll-free 800-234-1111
Regional Risk Management Education Centers
Northeast Center for Risk Management Education, University of Delaware, 302-831-2538
North Central Risk Mgmt Education Ctr, University of Nebraska, 402-472-2235
Southern Region Risk Mgmt Education Ctr, University of Arkansas, 501-671-2175
Western Center for Risk Management Education, Washington State Univ., 509-335-6360
Your State’s: Department or Agency of Agriculture, State Agritourism Organization, Department of Marketing or Tourism, University Cooperative Extension Service, and directories from the National Association of Resource Conservation and Development Councils, and Natural Resources Conservation Service.
Health and Safety Guidelines
National Institute for Occupational Safety & Health, Centers for Disease Control & Prevention (NIOSH) Toll-Free: 800-CDC-INFO (800-232-4636) TTY: (888) 232-6348
National Safety Council - Farm safety & workplace fact sheets (scroll down for Agricultural Safety) Toll-Free: 800-621-7615
NIOSH Agricultural Research Centers
The National Children's Center for Rural and Agricultural Health and Safety, Under Resources
Food Safety for Agritourism, University of Vermont Extension
Farm Animals & Visitors Public Health & Safety Tips for Animal/People Interaction, Vermont Department of Health
Risk Management Planning
Taking the First Step: Farm and Ranch Alternative Enterprise and Agritourism Resource Evaluation Guide. USDA, NRCS
Risk Management Planning for Agritourism, University of Vermont Extension
“Don’t Break A Leg… Managing Risks on Your Small Farm,” “Managing Marketing Risks” and other Risk Management Articles. The Small Farms Program-Cornell University
Articles on Risk Management Planning USDA Alternative Farming Systems Info Center, National Education Library 301-504-6559
North American Farmer’s Direct Marketing Association - Member’s liability insurance list, 62 White Loaf Road, Southhampton, MA 01073, 413-529-0386
“Understanding Farmers Comprehensive Personal Liability Policy: A Guide for Farmers, Attorneys and Insurance Agents.” National Ctr for Agricultural Law, Research, & Information, University of Arkansas, School of Law, 479-575-7646
Glossary of Terms
Liability: Legal responsibility of the business owner for the well-being of its customers Insurance: Used to recover and/or manage the outcomes of business practices and risks Waiver/Disclaimer: An agreement to forgo one’s right to a legal claim
Negligence: The failure to exercise the care that a reasonable person would exercise
References: Agritourism and Nature Tourism in California, Univ. of California Agriculture & Natural Resources Pub No.
3484; In the Eyes of the Law: Legal Issues Associated with Direct Farm Marketing, Univ. of Minnesota Tourism Ctr.